The Hindu Business Line : Untapped wealth of nutraceutical exports

The US and Europe are going to be emerging markets for nutraceutical exports from India because an existing large market base is already in place and consumers are looking for better and healthier options to prevent lifestyle-related diseases.

Akkshay G. Mehta

Nutraceutical is a term coined by Stephen DeFelice, renowned medical expert, in 1989 as a food, or part of a food, that provides medical or health benefits, including prevention and treatment of diseases.

Nutraceuticals include health foods, dietary supplements, medical foods, phytochemicals, functional foods, food medicine, designer food, herbal products, and processed foods.

Global markets are increasingly looking towards India for new and value-added nutraceuticals, particularly dietary supplements.

India, with its rich history of traditional medicine, is clearly positioned to reap benefits from the huge opportunity offered by US, Europe and other western markets.

Dietary supplements

Before focusing on the advantages that India possesses, let us gain some insight into what is the definition of dietary supplements and how big the global market is.

A dietary supplement exists in the form of a capsule, tablet, liquid or powder having medicinal or health benefits, which has to be taken orally. For example, vitamins, minerals, essential oils and herbal products.

The global market for dietary supplements was estimated at around $68 billion in 2006 by the Nutrition Business Journal, US, a leading publication on this industry. The global per capita consumption of dietary supplements comes to $11 per annum, while in Japan, Europe and US it is more than $75 per annum. In the next 10 years or so, the global dietary supplement market has the potential to reach more than $200 billion.

Right now, the Indian market share in the global dietary supplement market is miniscule. Even if Indian companies could garner a market share of 5 per cent in 10 years, the potential is tremendous!

The World Health Organisation (WHO) has predicted that the dietary supplements market will reach $5 trillion or $5,000 billion by 2050, if the market grows at 11 per cent every year.

Factors that are contributing to the high growth of the global dietary supplements market include an increased awareness of the benefits of having these products, increasing focus on prevention of diseases and maintenance of good health rather than on curing the diseases, modern lifestyles of high stress and reduced physical activity, improper food habits, etc., which are leading to a deterioration of health and an increase in lifestyle diseases such as diabetes and cardiovascular-related ailments. Also, higher disposable incomes, increasing urbanisation, globalisation and awareness, changing demographics, awareness of limitations in pharma healthcare and the initiatives by government bodies to increase dietary supplement consumption and thereby reduce healthcare costs, are all resulting in a higher growth in this segment.

Emerging opportunity

The market potential for the US and European markets alone for nutraceutical exports from India by 2013 will be to the tune of $75 billion.

A section of Indian companies such as Himalaya, Dabur, Charak, and Zandu, have been active in Ayurvedic exports to selective markets. However, most of the large companies have not ventured into nutraceuticals or dietary supplements due to regulatory confusion, lack of adequate awareness and understanding, and poor vision of the market.

Advantage India

A trend is emerging, where western nutraceutical manufacturers and distributors are eyeing Indian nutraceutical or dietary supplement companies. They are on the lookout for tying up with Indian companies with innovative products. Their point is, India, with its rich 5,000-year history of traditional medicines from systems such as Ayurveda, Siddha and Unani, has got an advantage over others to evolve a new medicine from the existing knowledge.

Indian companies also could combine global knowledge and evolve newer solutions.

India also possesses advantages such as cost effective manufacturing, availability of talented and inexpensive human resources, and is a hub to a large number of medicinal plants, trees and herbs (bio assets).

The regulations

Every country has evolved its own rules for dietary supplements. Most countries treat these as food supplements, while others consider them as healthcare products. Ingredients, labelling and claims, promotion, etc., vary from country to country depending on their rules and regulations.

Although dietary supplements are referred to by the US Food and Drug Administration (FDA) as foods, they are regulated differently from other foods and from drugs. Whether a product is classified as a dietary supplement, conventional food, or drug is based on its intended use.

Most often, classification as a dietary supplement is determined by the information that the manufacturer provides on the product label or in accompanying literature. The Dietary Supplements Health Education Act was passed in 1994, which now controls the Dietary Supplement regulations in the US.

Since nutraceutical products do not pass through clinical trials the manufacturer is held responsible if the products are unsafe or have hazardous content. Most countries have a checklist to follow before importation of the product into that country wherein substances such as pathogens, metallic content, and chemical residue are checked before permitting imports.

Need of the hour

To grab a larger pie from this world opportunity, Indian producers of nutraceutical products should unite to form a platform, to market India as a brand. There is a need for an increased collaboration on the manufacturing and research and development front among Indian manufacturers. There has to be coordination among all agencies, including policymakers, regulators and manufacturers. The manufacturing, validation, R&D and intellectual property protection needs to be standardised.

Global Trends, Challenges

Globally, the industry is witnessing new trends, such as new marketing and communication methods, innovative R&D and product development skills, new retailing programmes, increased validation and clinical research, heightened awareness due to media and government focus, and greater corporate responsibility due to health awareness programmes.

The unique challenges facing the industry are with regard to regulations, patenting, pricing, retailing costs, consumer actions, validation, ingredients, R&D, consumer awareness and education, and false claims by manufacturers.

(The author is Managing Director of Mission Vivacare Ltd, Mumbai. Responses to blfeedback@thehindu.co.in.)

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